From the FT: “China warned on Thursday that military intervention in Syria would hurt the world economy and push up oil prices, reinforcing Vladimir Putin’s attempts to talk US President Barack Obama out of air strikes. “Military action would have a negative impact on the global economy, especially on the oil price – it will cause a hike in the oil price,” Chinese vice-finance minister Zhu Guangyao told a briefing before the start of the G20 leaders’ talks.”

This follows Obama’s humiliating backtracking on his “redline” statement from yesterday at Stockholm, which hardly won the punting president much allies in the “world”: Mr Obama said that he had not set a “red line” over the use of chemical weapons in Syria, saying “the world set a red line”, a reference to a global treaty banning their use… “We as a country and the world are going to have to take tough choices,” he said. Russia and China have made it clear they will veto action on Syria in the Security Council.

Perhaps Russia and China, two of the most important nations in the world, are not part of it according to the US president?

Tensions surrounding the Syrian crisis boiled over at a G20 summit in St Petersburg. Mr Cameron has backed calls for military intervention in Syria after the Assad regime allegedly used chemical weapons. Mr Putin has opposed intervention and questioned Western claims about the attack. Britain has faced questions about its role and influence in the world since Mr Cameron was embarrassed by last week’s Commons vote to rule out a military strike against Syria.

Dmitry Peskov, Mr Putin’s official spokesman, is said to have highlighted that embarrassment, telling Russian journalists that Britain was now diplomatically irrelevant. Britain is “just a small island … no one pays any attention to them”, Mr Peskov is reported to have said. The blunt remarks appeared to realise British fears that the Russians would use the St Petersburg summit to upstage Mr Cameron over his criticism of Syria, Russia’s closest Middle Eastern ally.

Furious David Cameron today fired back at Russia's dismissal of Britain as a 'small island', reeling off a passionate, patriotic defence of the nation's global strengths and triumphs. Suggesting his tribute to Great Britain be 'set to music', Mr Cameron argued it had saved Europe from fascism, abolished slavery and 'invented most of the things worth inventing'.

The Prime Minister, speaking at the G20 in St Petersburg, refuted Russian claims that 'no one pays any attention to' the country he leads, insisting its art, sport, literature, diplomacy, philosophy, music, economy and military put it among the great nations of the world. And he even ridiculed the idea that the UK was just one island, declaring he did not want the People of Northern Island, Orkney or Shetland to 'feel left out' from his tribute to the nation's great history.

The extraordinary diplomatic row erupted last night when Russia dismissed Britain as ‘just a small island no one pays any attention to'. It meant the summit of world leaders descended into acrimony over planned military strikes on Syria.

Jordan has put its forces on high alert ahead of anticipated Western airstrikes against the Syrian regime. Jordan has said it will not be a launchpad for any foreign military intervention in Syria. But as the West threatens to strike the regime in Syria in response to the use of chemical weapons, it seems that Jordan’s army is ready for various possibilities.

The Jordanian Air force is one of the strongest in the Arab world, possessing many of the most advanced fighter-jets in the world today. Jordan is also one of few countries that possess the multiple Himars truck -mounted rocket launchers that exceed 70 kilometers in range and can identify a target within seconds. A political solution in Syria remains the favorable option for Jordan, but the army says it is prepared to defend the country and its people at any time.

‘Gibraltar is British and wants to stay British and for us that is the end of the matter,’ he said. ‘We will never negotiate over sovereignty over the people of Gibraltar’s heads, as the last Labour government did.’ Veteran Labour MP Sir Gerald Kaufman urged Mr Hague to make it clear to Spain that the harassment ‘will not be tolerated and that, if need be, there will be reprisals’. Mr Hague replied: ‘I absolutely will.’

But DUP MP Ian Paisley Jr urged him to go further and order Federico Trillo to leave the capital if the ‘hostility’ towards Gibraltar is not halted. Tensions over the Rock escalated this summer after Spain threatened to impose a £43 fee on anyone entering or leaving the British territory. Madrid also imposed strict checks on traffic at the border with Gibraltar in protest at the creation of an artificial reef.

Speaking to journalists from Russia’s state Channel 1 television and Associated Press, Russian President Vladimir Putin made a number of decisive statements regarding the supposed use of chemical weapons in the Syrian conflict, which evoked a threat of a US-led strike on Syria.

“We believe that at the very least we should wait for the results of the UN inspection commission in Syria,” Putin said, adding that so far there is no information about what chemical agent exactly was used in the attack in Damascus’ suburbs and who did it.

“I’ve already said I find it absolutely ridiculous that [the Syrian] government’s armed forces, which today are actually on an offense mission and in some regions have already encircled the so-called rebels and are finishing them off, that the Syrian army has used prohibited chemical weapons,” Putin said. “They know all too well that this could become a cause for sanctions and even for a military operation against them. That’s stupid and illogical.”

“We proceed from the assumption that if anyone has information that chemical weapons were used by the Syrian regular army, then such proof must be presented to the UN Security Council and the UN inspectors,” Putin said, stressing that the proof must be “convincing” and not based on “rumors” or any sort of “eavesdropped intelligence data,” conversations etc. Putin says he “does not exclude” that Russia may agree with a military operation if it is proved that the Syrian government is behind the attack, however he emphasized that in accordance with international law a decision of the UN Security Council is needed for that.

Leaders of the US Senate Foreign Relations Committee said they reached an agreement on a draft authorization for the use of military force in Syria, paving the way for a vote by the committee on Wednesday. However, the draft is much narrower than the request made by Obama and includes a provision barring the use of US troops on the ground.

Speaking after the United Nations said two million Syrians had fled a conflict that posed the greatest threat to world peace since the Vietnam war, Obama said on Tuesday the United States also has a broader plan to help rebels defeat Assad's forces. "What we are envisioning is something limited. It is something proportional. It will degrade Assad's capabilities," Obama said. "At the same time we have a broader strategy that will allow us to upgrade the capabilities of the opposition."

Having startled friends and foes alike by delaying a punitive attack on Assad until Congress reconvenes and agrees, Obama met congressional leaders at the White House to urge a prompt decision and assure them it did not mean another long war like Iraq or Afghanistan. John Boehner, the Republican speaker of the US House of Representatives, and House Majority Leader Eric Cantor both pledged their support for military action after the meeting.

Amid continuing nervousness across the Middle East, Israeli defence ministry officials were forced to confirm the launch of a sparrow missile over the Mediterranean at 9.15am (6.15 GMT) after Russia revealed that its radar systems had detected it. The launch's disclosure initially provoked panic in Moscow that a Western-backed strike on Syrian targets had begun, before the US, Britain and France issued denials and Israel acknowledged it had conducted a test.

"The Israel missile defence organisation (IMDO) and the US missile defence agency (MDA) completed a successful flight test new version of the sparrow target missile," a defence ministry statement said. "This is the first flight out test of this new version of the sparrow, and was conducted at Israeli test range over the Mediterranean sea."

Confirmation came only after Moscow had announced that its early warning system at Armavir in southern Russia had tracked two missiles being fired from the central Mediterranean in the general direction of Syria.

ITAR TASS reports that Russia’s Black and Baltic Sea Fleets’ Ropucha-class landing ships Novocherkassk (150 marines on board) and Minsk (225 marines) have sailed off for the Mediterranean Sea. What was not reported is that the destination of the two marine carrying ships is the sensitive area around Syria already staked out by the US navy. It is implied.

From the Russian press agency: “The Russian Navy continues stage-by-stage rotation of warships and support ships of the standing naval force in the Mediterranean,” the spokesman said. “Having passed through the Bosporus and Dardanelles straits, the big landing ships will reach the designated area in the Mediterranean Sea on September 5 or 6 to start their mission under the command of the remote zone headquartered onboard the big anti-submarine ship of the Russian Pacific Fleet Admiral Panteleyev.”

Currently, one of the key tasks of the Russian standing naval force in the Mediterranean is “comprehensive monitoring over the air, underwater and surface situation in the zone of its deployment,” the Russian defence ministry said, adding that the rotation of Russian warships in the Mediterranean Sea would continue till mid-September.

Yet now Libya has almost entirely stopped producing oil as the government loses control of much of the country to militia fighters.

Mutinying security men have taken over oil ports on the Mediterranean and are seeking to sell crude oil on the black market. Ali Zeidan, Libya’s Prime Minister, has threatened to “bomb from the air and the sea” any oil tanker trying to pick up the illicit oil from the oil terminal guards, who are mostly former rebels who overthrew Muammar Gaddafi and have been on strike over low pay and alleged government corruption since July.

As world attention focused on the coup in Egypt and the poison gas attack in Syria over the past two months, Libya has plunged unnoticed into its worst political and economic crisis since the defeat of Gaddafi two years ago. Government authority is disintegrating in all parts of the country putting in doubt claims by American, British and French politicians that Nato’s military action in Libya in 2011 was an outstanding example of a successful foreign military intervention which should be repeated in Syria.

Israel and Saudi Arabia have little love for each other but both are pressing their mutual friend in the White House to hit President Bashar al-Assad hard. And both do so with one eye fixed firmly not on Syria but on their common adversary - Iran.

Israel's response to Obama's surprise move to delay or even possibly cancel air strikes made clear that connection: looking soft on Assad after accusing him of killing hundreds of people with chemical weapons may embolden his backers in Tehran to develop nuclear arms, Israeli officials said. And if they do, Israel may strike Iran alone, unsure Washington can be trusted.

Neither US ally is picking a fight with Obama in public. Israeli Prime Minister Benjamin Netanyahu said on Sunday that the nation was "serene and self-confident"; Saudi Foreign Minister Prince Saud al-Faisal simply renewed a call to the "international community" to halt Assad's violence in Syria.

But the Saudi monarchy, though lacking Israel's readiness to attack Iran, can share the Jewish state's concern that neither may now look with confidence to Washington to curb what Riyadh sees as a drive by its Persian rival to dominate the Arab world.

A senior military source confirmed to the Lebanese newspaper that the meeting had, indeed, taken place, but said that it had not been held inside the Dahiya – a neighborhood controlled by Hezbollah – but outside it. The senior source said that the Iranian official is a military officer and that the meeting was devoted to the military and logistical readiness of Hezbollah for a confrontation with Israel, which, he added, is just “a stone's throw away” from Lebanon.

The source added that less than 48 hours after the meeting, 10,000 Hezbollah guerrillas and unspecified “special forces” began extensive military exercises in southern Lebanon and the Bekaa valley. He said that 10,000 men took part in the exercises, which were the largest of the kind ever conducted in that area. He posited that strengthening Hezbollah in the region is also intended to enable the continued flow of weapons from Damascus to the organization, and especially advanced weaponry.

The report could be an effort at disinformation and is probably meant to intimidate Israel and hint that Hezbollah – an Iranian proxy force – would fire its missiles at the Jewish state if it attacks Iran.

The EU trade’s body said 154 new tariffs and restrictive measures have been pushed through over the past year while “virtually none” has been abolished. This violates a promise by the G20 bloc of leading powers to dismantle barriers before they become embedded in the global system. “It is a striking phenomenon. Looming protectionism is now more than ever a significant threat to global growth,” said trade EU commissioner Karel de Gucht. “It is high time the G20 pledge be adhered to in full,” he added, exhorting the G20 to act at the St Petersburg summit this week, an event certain to be dominated by Syria.

Protectionism is the dog that did not bark during the global crisis of 2008-2009, but trade abuses have been building up ever since. They have spread rapidly over the past year as the credit cycle turns in Asia and Latin America, and once-booming economies exhaust the low-hanging fruit of catch-up growth. The worry is that emerging markets - now half global output - are turning their backs on free trade as political pressure mounts.

The Syrian president issued a dire warning that any Western military intervention could lead to "regional war" and would harm "the interests of France". "Whoever accuses must provide proof. We have challenged the United States and France to provide the slightest proof. (US President Barack) Obama and (French president François) Hollande have been incapable (of doing so) even to their own people," Assad told French newspaper Le Figaro in an exclusive interview.

He questioned the "logic" of claims that his forces carried out the August 21 attack outside Damascus, which the US said killed 1,429 people. "Supposing our army wishes to use weapons of mass destruction. Is it possible that it would do so in a zone where it is located and where (our) soldiers were wounded by these arms, as United Nations inspectors have noted during visits to hospitals where they were treated? Where is the logic?" he asked.

Describing the Middle East as a "powder keg" whose "fuse is getting shorter", he warned it would "explode" if Western forces struck Syria. "Nobody knows what will happen (after such strikes). Everyone will lose control of the situation when the powder keg explodes. Chaos and extremism will spread. The risk of a regional war exists," he warned.

Defending his record despite a series of scandals on his watch, Cardinal Tarcisio Bertone, 78, also appeared to suggest that any blame for errors should shared by Pope Benedict XVI, who appointed him as secretary of state, effectively his number two, in 2006. The backlash followed the surprise announcement on Saturday that Pope Francis had named Archbishop Pietro Parolin, 58, currently nuncio in Venezuela, as Cardinal Bertone’s replacement, with a handover due next month.

Cardinal Bertone's tenure culminated with the leaking by Benedict's butler of papal correspondence. Among the documents, it was alleged Cardinal Bertone ran a Vatican riven by petty rivalries, corruption and mismanagement. But speaking on the sidelines of a mass being celebrated on Sunday in Sicily, Cardinal Bertone chose to fight back.

“On balance I consider these seven years to have been positive," he said. “Naturally there were problems, particularly in the last two years, they have made many accusations against me... A mix of crows and vipers." He said while it may seem like the secretary of state "decides and controls everything", he insisted that was not the case.

“There were matters that got out of control because they were problems which were sealed within the management of certain people who did not contact the secretary of state.. I always gave everything but certainly I had my shortcomings and if I could relive certain moments now I would act differently. But that does not mean that I did not try to serve the church.”